Organization Development & Change

Thomas G. CummingsUniversity of Southern California

Christopher G. WorleyUniversity of Southern California

Pepperdine University

;% SOUTH-WESTERN8 " CENGAGE Learning-

ULB Darmstadt

17901532

Australia • Brazil • Canada • Mexico • Singapore • Spain • UnitedKingdom • UnitedStates

brief contents

Preface

CHAPTER 1General Introduction to OrganizationDevelopment

PART 1Overview of Organization Development

CHAPTER 2The Nature of Planned Change

CHAPTER 3The Organization DevelopmentPractitioner

PART 2The Process of Organization Development

CHAPTER 4Entering and Contracting

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22

23

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75

CHAPTER 14Restructuring Organizations

CHAPTER 15Employee Involvement

CHAPTER 16Work Design

PART 5Human Resource ManagementInterventions

CHAPTER 17Performance Management

CHAPTER 18Developing Talent

CHAPTER 19Managing Workforce Diversityand Wellness

CHAPTER 5Diagnosing Organizations 87

CHAPTER 6Diagnosing Groups and Jobs 107

CHAPTER 7Collecting and Analyzing DiagnosticInformation 121

CHAPTER 8Feeding Back Diagnostic Information 139

CHAPTER 9Designing Interventions 151

CHAPTER 10Leading and Managing Change 163

CHAPTER 11Evaluating and InstitutionalizingOrganization Development Interventions 189

PART 3Human Process Interventions 252

CHAPTER 12Interpersonal and Group ProcessApproaches 253

CHAPTER 13Organization Process Approaches 276

PART 4Technostructural Interventions 314

PART 6Strategic Change Interventions

CHAPTER 20Transformational Change

CHAPTER 21Continuous Change

CHAPTER 22Transorganizational Change

PART 7Special Applications of OrganizationDevelopment

CHAPTER 23Organization Development in GlobalSettings

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CHAPTER 24Organization Development in NonindustrialSettings: Health Care, School Systems, thePublic Sector, and Family-Owned Businesses 651

CHAPTER 25Future Directions in OrganizationDevelopment

Glossary

Name Index

Subject Index

693

746

756

760

contents

Preface

CHAPTER 1

General Introduction to Organization Development

Organization Development Defined

The Growth and Relevance of Organization Development

A Short History of Organization DevelopmentLaboratory Training BackgroundAction Research and Survey Feedback BackgroundNormative BackgroundProductivity and Quality-of-Work-Life BackgroundStrategic Change Background

Evolution in Organization Development

Overview of The Book

Summary

Notes

PART1Overview of OrganizationDevelopment

CHAPTER 2The Nature of Planned Change

Theories of Planned ChangeLewin's Change ModelAction Research ModelThe Positive ModelComparisons of Change Models

General Model of Planned ChangeEntering and ContractingDiagnosingPlanning and Implementing ChangeEvaluating and Institutionalizing Change

Different Types of Planned ChangeMagnitude of Change

Application 2-1 Planned Change at the San Diego CountyRegional Airport Authority

Degree of Organization

Application 2-2 Planned Change in an Underorganized SystemDomestic vs. International Settings

Critique of Planned ChangeConceptualization of Planned ChangePractice of Planned Change

Summary

Notes

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vi Contents

CHAPTER 3

The Organization Development Practitioner 46

Who is the Organization Development Practitioner? 46

Competencies of an Effective Organization Development Practitioner 48

The Professional Organization Development Practitioner 53Role of Organization Development Professionals 53

Application 3-1 Personal Views of the Internal and ExternalConsulting Positions 56

Careers of Organization Development Professionals 59

Professional Values 60

Professional Ethics 61Ethical Guidelines 61Ethical Dilemmas 62

Application 3-2 Kindred Todd and the Ethics of OD 65

Summary 66

Notes 67

Appendix 70

PART 2The Process of Organization Development 74

CHAPTER 4Entering and Contracting 75

Entering into an OD Relationship 76Clarifying the Organizational Issue 76Determining the Relevant Client 76Selecting an OD Practitioner 77

Developing a Contract 79Mutual Expectations 79

Application 4-1 Entering Alegent Health 80Time and Resources 81Ground Rules 81

Interpersonal Process Issues in Entering and Contracting 81

Application 4-2 Contracting with Alegent Health 82

Summary 86

Notes 86

CHAPTER 5

Diagnosing Organizations 87

What is Diagnosis? 87

The Need for Diagnostic Models 88

Open Systems Model 89Organizations as Open Systems 89Diagnosing Organizational Systems 92

Organization-Level Diagnosis 94Organization Environments and Inputs 94Design Components 96Outputs 99Alignment 99Analysis 99

Application 5-1 Steinway's Strategic Orientation 100

Summary 105

Notes 105

Contents

CHAPTER 6Diagnosing Groups and Jobs 107

Group-Level Diagnosis 107Inputs 107Design Components 108Outputs 109Fits 110Analysis ' 110

Application 6-1 Top-Management Team at Ortiv Glass Corporation 111

Individual-Level Diagnosis 113Inputs 113Design Components 114Fits 115Analysis 115

Application 6-2 Job Design at Pepperdine University 116

Summary 119

Notes 120

CHAPTER 7Collecting and Analyzing Diagnostic Information 121

The Diagnostic Relationship 121

Methods for Collecting Data 123Questionnaires 124Interviews 126Observations 127Unobtrusive Measures 128

Sampling 129

Techniques for Analyzing Data 130Qualitative Tools 130

Application 7-1 Collecting and Analyzing Diagnostic Data at Alegent Health 132

Quantitative Tools 133

Summary 737

Notes 138

CHAPTER 8Feeding Back Diagnostic Information 139

Determining the Content of the Feedback 139

Characteristics of the Feedback Process 141

Survey Feedback 142What Are the Steps? 142

Application 8-1 Training OD Practitioners in Data Feedback 143Survey Feedback and Organizational Dependencies 145

Application 8-2 Operations Review and Survey Feedback atPrudential Real Estate Affiliates 146

Limitations of Survey Feedback 147Results of Survey Feedback 148

Summary 149

Notes 149

CHAPTER 9Designing Interventions 151

What are Effective Interventions? 151

How to Design Effective Interventions 152Contingencies Related to the Change Situation 152Contingencies Related to the Target of Change 154

viii Contents

Overview of Interventions 156

Human Process Interventions 156

Summary 161

Notes 162

CHAPTER 10Leading and Managing Change 163

Overview of Change Activities 163

Motivating Change 165Creating Readiness for Change 165Overcoming Resistance to Change 166

Application 10-1 Motivating Change in the Sexual Violence PreventionUnit of Minnesota's Health Department 168

Creating a Vision 169Describing the Core Ideology 170Constructing the Envisioned Future 171

Developing Political Support 171

Application 10-2 Creating a Vision at Premier 172Assessing Change Agent Power 174Identifying Key Stakeholders 175Influencing Stakeholders 175

Managing the Transition 176

Application 10-3 Developing Political Support for the StrategicPlanning Project in the Sexual Violence Prevention Unit 177

Activity Planning 178Commitment Planning 179Change-Management Structures 179Learning Processes 179

Sustaining Momentum 180

Application 10-4 Transition Management in the HP-Compaq Acquisition 181Providing Resources for Change 182Building a Support System for Change Agents 183Developing New Competencies and Skills 183Reinforcing New Behaviors 183Staying the Course 184

Summary 184

Notes 185

Application 10-5 Sustaining Transformational Change atthe Veterans Health Administration 187

CHAPTER 11Evaluating and Institutionalizing OrganizationDevelopment Interventions 189

Evaluating Organization Development Interventions 189Implementation and Evaluation Feedback 189Measurement 192Research Design 197

Institutionalizing Organizational Changes 200Institutionalization Framework 200

Application 11-1 Evaluating Change at Alegent Health 201Organization Characteristics 203Intervention Characteristics 204Institutionalization Processes 205Indicators of Institutionalization 206

Application 11-2 Institutionalizing Structural Change at Hewlett-Packard 208

Summary 210

Contents

Notes 210

Selected Cases 212Kenworth Motors 212Peppercorn Dining 217Sunflower Incorporated 239Initiating Change in the Manufacturing and Distribution Division of PolyProd 241Evaluating the Change Agent Program at Siemens Nixdorf (A) 247

PART 3Human Process Interventions 252

CHAPTER 12Interpersonal and Group Process Approaches 253

Process Consultation 253Group Process 254Basic Process Interventions 255Results of Process Consultation 257

Application 12-1 Process Consultation at Action Company 258

Third-Party Interventions 259An Episodic Model of Conflict 260Facilitating the Conflict Resolution Process 261

Application 12-2 Conflict Management at Bait Healthcare Corporation 262

Team Building 263Team-Building Activities 264Activities Relevant to One or More Individuals 267Activities Oriented to the Group's Operation and Behavior 268Activities Affecting the Group's Relationship with the Restof the Organization 268

Application 12-3 Building the Executive Team at Caesars Tahoe 269The Manager's Role in Team Building 270The Results of Team Building 271

Summary 273

Notes 273

CHAPTER 13Organization Process Approaches 276

Organization Confrontation Meeting 276Application Stages 276Results of Confrontation Meetings 277

Application 13-1 A Work-Out Meeting at GeneralElectric Medical Systems Business 278

Intergroup Relations Interventions 279Microcosm Groups 279Application Stages 280Resolving Intergroup Conflict 281

Large-Group Interventions 284

Application 13-2 Improving Intergroup Relationshipsin Johnson & Johnson's Drug Evaluation Department 285

Application Stages 287

Application 13-3 Using the Decision Accelerator to GenerateInnovative Strategies in Alegent's Women's and Children's Service Line 290

Results of Large-Group Interventions 294

Summary 295

Notes 295

Selected Cases 297Lincoln Hospital: Third-Party Intervention 297Ben & Jerry's (A): Team Development Intervention 304

Contents

PART 4Technostructural Interventions 314

CHAPTER 14Restructuring Organizations 315

Structural Design 315The Functional Structure 316The Divisional Structure 318The Matrix Structure 319The Process Structure 322The Customer-Centric Structure 324

Application 14-1 Healthways' Process Structure 325

The Network Structure 328

Downsizing 331

Application 14-2 Amazon.corn's Network Structure 332Application Stages 334

Results of Downsizing 337

Application 14-3 Strategic Downsizing at Agilent Technologies 338

Reengineenng 340Application Stages 341

Application 14-4 Honeywell lAC's Totalplant™ Reengineenng Process 344

Results from Reengineering 346

Summary 346

Notes 347

CHAPTER 15Employee Involvement 350

Employee Involvement: What Is It? 350A Working Definition of Employee Involvement 351The Diffusion of Employee Involvement Practices 352How Employee Involvement Affects Productivity 352

Employee Involvement Applications 354Parallel Structures 354

Application 15-1 Using the Al Summit to BuildUnion-Management Relations at Roadway Express 356

Total Quality Management 359

Application 15-2 Six-Sigma Success Story at GE Financial 365High-Involvement Organizations 367

Application 15-3 Building a High-Involvement Organization

at Air Products and Chemicals, Inc. 370

Summary 373

Notes 373

CHAPTER 16

Work Design 376

The Engineering Approach 376

The Motivational Approach 377The Core Dimensions of Jobs 378Individual Differences 379Application Stages 380Barriers to Job Enrichment 382

Application 16-1 Enriching Jobs at the Hartford's EmployeeRelations Consulting Services Group 383

Results of Job Enrichment 385

The Sociotechnical Systems Approach 386Conceptual Background 387Self-Managed Work Teams 388

Contents x i

Application Stages 391 -

Results of Self-Managed Teams 393

Application 16-2 Moving to Self-Managed Teams at ABB 394

Designing Work for Technical and Personal Needs 397Technical Factors 398Personal-Need Factors 399Meeting Both Technical and Personal Needs 400

Summary 401

Notes 402

Selected Cases 405City of Carlsbad, California: Restructuring the Public Works Department (A) 405C&S Wholesale Grocers: Self-Managed Teams 408

PART 5Human Resource Management Interventions 419

CHAPTER 17

Performance Management 420

A Model of Performance Management 421

Goal Setting 422Characteristics of Goal Setting 422Establishing Challenging Goals 423Clarifying Goal Measurement 423Application Stages 424Management by Objectives 424Effects of Goal Setting and MBO 426

Performance Appraisal 426

Application 17-1 The Goal-Setting Process at Siebel Systems 427The Performance Appraisal Process 428Application Stages 430Effects of Performance Appraisal 431

Reward Systems 431

Application 17-2 Adapting the Appraisal Process at CapitalOne Financial 432

Structural and Motivational Features of Reward Systems 434Skill- and Knowledge-Based Pay Systems 437Performance-Based Pay Systems 438Gain-Sharing Systems 440Promotion Systems 442Reward-System Process Issues 443

Application 17-3 Revising the Reward Systemat Lands' End 444

Summary 447

Notes 447

CHAPTER 18Developing Talent 451

Coaching and Mentoring 451What Are the Goals? 452Application Stages 452The Results of Coaching and Mentoring 453

Career Planning and Development Interventions 453What Are the Goals? 454Application Stages 455The Results of Career Planning and Development 463

Management And Leadership Development Interventions 463

Application 18-1 PepsiCo's Career Planning and Development Framework 464What Are the Goals? 466Application Stages 466

xii Contents

Application 18-2 Leading Your Business at Microsoft Corporation 468The Results of Development Interventions 469

Summary 469

Notes 470

CHAPTER 19Managing Workforce Diversityand Wellness 473

Workforce Diversity Interventions 473What Are the Goals? 473Application Stages 475The Results for Diversity Interventions 478

Employee Stress and Wellness Interventions 479What Are the Goals? 479

Application 19-1 Embracing Employee Diversity at Baxter Export 480Applications Stages 481The Results of Stress Management and Wellness Interventions 486

Summary 487

Notes 488

Application 19-2 Johnson & Johnson's Health and Wellness Program 490

Selected Cases 492Employee Benefits at HealthCo 492Sharpe BMW 497

PART 6Strategic Change Interventions 504

CHAPTER 20Transformational Change 505

Characteristics of Transformational Change 505Change Is Triggered by Environmental and Internal Disruptions 506Change Is Aimed at Competitive Advantage 506Change Is Systemic and Revolutionary 507Change Demands a New Organizing Paradigm 508Change Is Driven by Senior Executives and Line Management 508Change Involves Significant Learning 509

Integrated Strategic Change 509

Organization Design . 512

Application 20-1 Managing Strategic Change at Microsoft Canada 513

Conceptual Framework 515

Culture Change 518

Application 20-2 Organization Design at Deere & Company 519Concept of Organization Culture 520Organization Culture and Organization Effectiveness 521Diagnosing Organization Culture 523The Behavioral Approach 523The Competing Values Approach 524The Deep Assumptions Approach 525

Summary 528

Notes 529

Application 20-3 Culture Change at IBM 533

CHAPTER 21Continuous Change 535

Self-Designing Organizations 535The Demands of Adaptive Change 536Application Stages 536

Learning Organizations 538Conceptual Framework 538

Contents xiii

Application 21-1 Self-Design at American Healthways CorporationOrganization Learning InterventionsKnowledge Management InterventionsOutcomes of OL and KM

Application 21-2 Implementing a Knowledge ManagementSystem at Motorola Penang

Built-To-Change OrganizationsDesign GuidelinesApplication Stages

Summary

Notes

Application 21-3 Creating a Built-to-Change OrganizationatCapital One Financial

CHAPTER 22Transorganizational Change

Transorganizational RationaleMergers and AcquisitionsApplication Stages

Strategic Alliance InterventionsApplication Stages

Application 22-1 The Sprint and Nextel Merger: The First Two Years

Network Interventions

Application 22-2 Building Alliance RelationshipsCreating the NetworkManaging Network Change

Application 22-3 Fragile and Robust—Network Changein Toyota Motor Corporation

Summary

Notes

Selected CasesFourwinds MarinaLeadina Strateaic Chanae at DaVita: The Intearation of the Gambro Acauisition

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PART 7Special Applications of Organization Development 613

CHAPTER 23Organization Development in Global Settings 614

Organization Development Outside the United States 615Cultural Context 616Economic Development 618How Cultural Context and Economic Development Affect OD Practice 619

Application 23-1 Modernizing China's Human ResourceDevelopment and Training Functions 623

Worldwide Organization Development 625Worldwide Strategic Orientations 626The International Strategic Orientation 627The Global Strategic Orientation 629The Multinational Strategic Orientation 631

Application 23-2 Implementing the Global Strategy: Changing the Cultureof Work in Western China 632

The Transnational Strategic Orientation 636

Global Social Change 639Global Social Change Organizations 640Application Stages 641Change Agent Roles and Skills 644

Contents

Application 23-3 Social and Environmental Change at Floresta 645

Summary 647

Notes 647

CHAPTER 24Organization Developmentin Nonindustrial Settings: Health Care,School Systems, the Public Sector, and Family-Owned Businesses 651

Organization Development in Health Care 651Trends in Health Care 652Opportunities for Organization Development Practice 655Success Principles for OD in Health Care 657Conclusions 658

Organization Development in School Systems 659Education: Industrial-Age Roots 659Changing Conditions Cause Stress 659Disappointing Reform Efforts 660A New Metaphor for Schools 662Future Opportunities for OD Practice 664Technology's Unique Role in School OD 665Conclusions 667

Organization Developmentin the Public Sector 667Comparing Public- and Private-Sector Organizations 669Recent Research and Innovations in Public-SectorOrganizational Development 674Conclusions 675

Organization Development in Family-Owned Businesses 675The Family Business System 676Family Business Developmental Stages 679A Parallel Planning Process 680Values 680Critical Issues in Family Business 681OD Interventions in Family Business System 684

Summary 688

Notes 689

CHAPTER 25Future Directions in Organization Development 693

Trends within Organization Development 693Traditional 693Pragmatic 694Scholarly 695Implications for OD's Future 695

Trends in the Context of Organization Development 697The Economy 697The Workforce 700Organizations 701Implications for OD's Future 702

Summary 708

Notes 709

Integrative Cases 712B. R. Richardson Timber Products Corporation 712Building the Cuyahoga River Valley Organization* 728Black & Decker International: Globalization of the Architectural Hardware Line 738

Glossary 746

Name Index 756

Subject Index 760